Stern sees climate positives in credit crisis

The financial crisis and a wider economic slowdown will be 'on balance' positive for efforts to tackle climate change, and for the prospects for an international agreement, according to Nicholas Stern.
'The pluses outweigh the minuses,' said Stern, the author of the influential Stern Review on Climate Change, speaking at the launch on Monday of an academic research initiative involving Munich Re and the London School of Economics (LSE).
He said that the current financial crisis was '10, 15, 20 years in the making, it was possible to understand how it was building up. Climate change is very similar. The current crisis is showing us the consequences of ignoring our long-term actions.' (Source: Environmental Finance)

'We’re also going to have to grow out of this – we’ll be looking for engines of growth to pull us out, and low-carbon growth will be a very important engine,' he added.

Stern’s views are in contrast to many in the international climate policy community, who are concerned that an economic slowdown will make it more difficult to reach agreement on a successor to the Kyoto Protocol. Agreement at, or soon after, UN talks in Copenhagen in December 2009 is necessary to prevent a gap between the expiration of the Kyoto greenhouse gas reduction targets at the end of 2012 and new emissions goals, say experts.

Stern did concede that the crisis is likely to distract policy-makers: 'Politicians, like any other human beings, have limited powers to think about two things at once.

'The second negative is that people will be cautious about anything that raises costs in difficult times,' he said, but argued that any cost rises 'will not be that huge'. He added that falling oil prices would make it possible to introduce some policy measures to encourage energy efficiency.

Stern was talking at the launch of the LSE’s Grantham Research Institute on Climate Change and the Environment, which he will chair. German reinsurance giant Munich Re will provide £3 million ($5.2 million) over five years to help the institute examine the economic and financial implications of climate change.